NEW SOUTH WALES ELECTION

Election Summary

Bob Carr was always a master of political timing, as events since his retirement in mid-2005
have amply demonstrated. Almost from the day he left office,
decisions made by his government have re-surfaced to haunt the administration of
new Premier Morris Iemma. Whether it be the road tunnels, desalination, public
transport or hospitals, issues once seemingly under control have taken on a
political life of their own.

But if Morris Iemma has been happy to distance himself from many legacies of
the Carr government, one bequest for which he is grateful is the huge electoral buffer
that lies between Labor staying in office after next years state election and the Coalition
taking control in Macquarie Street.

Labor can lose up to eight seats and still retain its majority in the
Legislative Assembly. The Coalition need to take nine seats off Labor to deprive
the Iemma government of its majority, a uniform swing of 8.7%. But with seven
seats held by Independents, including six holding normally safe Coalition seats, the
opposition needs to win an extra 16 seats to govern in its own right, a swing
of 12.3%. Somewhere between these two swings lies a hung parliament, where the fate of government
could depend on whether Labor or the Coalition hold more seats.

Labor's strong position was built on its victory in 2003, a result that re-affirmed
the landslide achieved in 1999.

Note: Port Macquarie was won by Rob
Oakeshott, who had been elected as a National Party MP in 1999, but resigned
from the party and sat as an Independent from March 2002. Tamworth
was won by Independent Tony Windsor in 1999. He was elected as MHR for New
England at the 2001 Federal election, and the National Party recovered the seat
at a December 2001 by-election.

With the party numbers and party share of the vote almost identical, it
appeared the 2003 election was simply a repeat of 1999 result. But this surface appearance of
electoral calm masked a significant strengthening of Labor's grip on office.

Labor increased its
margin in a string of seats that had been Liberal held going into the 1999
election. The seats of Camden (swing to Labor +8.9%), Ryde
(+8.9%), Maitland (+8.0%), Georges
River (+7.4%), Strathfield (+7.4%), Miranda
(+6.9%) and Menai (+5.3%) were all Liberal held seats
before the 1999 election and recorded seven of the eight largest swings to Labor
in 2003. The largest swing was 11.7% in Kogarah, which
had been Labor's most marginal seat going into 1999. If the pre-1999 margins
are used as a measure of where the state's marginal
seats lie, then the result of the 2003 election was a significant strengthening
of Labor's position in the key battlegrounds for government.

While there was an overall swing of 0.2% to Labor in 2003, Labor's
marginal seat strategy had a more dramatic effect on the swing needed in
marginal seat. Going into the 2003 election, the Coalition needed a swing of 6.6% to deprive Labor of its majority,
but came out of the election needing a swing of 9.1%. Labor's saturation advertising campaign,
outspending the Coalition two-to-one, had its most dramatic impact on the key
marginal seats. (The redistribution has reduced the swing figure marginally to 8.7%.)

What is also overlooked in the 2003 results was how close internal divisions
went to sending the Coalition backwards. The Liberal Party came perilously close
to losing Bega
and Willoughby to Independents, finding itself forced to divert scarce resources
from marginal seats to these campaigns. The Coalition won Clarence
and South Coast from Labor. Both were seats the
Coalition should have won in 1999, and the loss of both Camden and Monaro
meant that the Coalition had no net gains from its 2003 campaign.